Tuesday, September 20, 2011

MYOPIA AND ITS CONSEQUENCES ... WHY THE KIDS HAVE LITTLE TO LOOK FORWARD TO

In recent days, there has been a fair amount of publicity about the little town of West Pittston, Pennsylvania. The story is pretty simple. In 1990, after suffering floods from time to time, the town had a referendum as to whether it should join other cities along the Susquehanna River and build a levee to protect itself from flooding. For various reasons – including a desire to preserve their lovely water views – the residents voted no. Now that the view has given way to the flood, residents are asking themselves just what their predecessors were thinking – or smoking – that led them to opt for a view rather than a levee.

I think the story is a reasonably apt analogy of what we have been doing in the United States for the last 20 years or so. After World War II, the United States used its resources to build a powerful economy by investing in its educational system, in its infrastructure and in lots of public and privately funded research and development. We also encouraged immigration, thus regularly leavening society with ambitious new citizens.

In those days, we had – for whatever reason – a collective understanding that investing for the future would create continuing opportunities for future generations. These days we cannot seem to distinguish between investing and spending, seem focused on consumption rather than production and appear unwilling to recognize that failing to invest will leave future generations without the capabilities required to succeed in an ever more competitive world.

In the early 1950’s, we were spending nearly 5% of our GDP on infrastructure, while simultaneously laying other foundations for the success of future generations. We built the best educational system on the planet, created world class communication capabilities, encouraged research and development by both government and industry, urged businesses to increase manufacturing and distribution productivity, and built transportation systems able to move goods into, out of and within the country quickly and efficiently. These days, we spend less than 2% of GDP on infrastructure, and would need to spend $2 trillion just to repair what we have allowed to deteriorate. Since we have never created an adequate funding structure, there seems little hope we will find the money needed. Moreover, we have no effective mechanism to plan for the additional roads, bridges, water and septic systems, airports, mass transit systems, electrical distribution capabilities, and other things our kids and grandkids will need in future years.

Hardly a day goes by in which we are not reminded, in one way or another, of the growing consequences of our myopia. Our schools are turning out students unable to compete with students from other countries. Our electrical distribution grid is so heavily loaded that whole sections of the country go dark in response to minor problems at single facilities. We remain dependent on other countries, many of them actively hostile, for major portions of our energy. Our prisons hold a larger percentage of our population than do the prisons of any other country. Ever larger traffic jams rob industry and individuals of thousands of productive hours. The inflation adjusted median income of our workers is lower than it was 20 years ago. 46 million citizens live below the preposterous poverty line of $22,314 for a family of four. 50 million citizens lack health insurance. 15 million people are unemployed. Our debt is out of hand, our annual deficits are enormous and our future obligations exceed the nation’s net worth.

Despite these awful realities, we seem unable to grasp the reality of our situation. We continue to choose leaders who talk in ideological generalities instead of specific solutions. We insist on injecting irrelevant social issues into a political dialogue that should be focused on our economic future and we seem determined to drown out any voice that offers solutions alien to our own beliefs.

As I write this, the airways are alive with talking heads denouncing the president’s jobs bill, which incorporates provisions for higher taxes on the wealthiest Americans. Does any serious person doubt that the government needs more revenue? Can serious people dispute the reality that in the early 1990’s, when the wealthy paid higher taxes, we had a more productive and more successful society?
I think the answer to those questions is no. Does that mean we can solve all our problems with higher taxes? Of course not. But to solve our problems, we cannot eliminate government, which can do things individual citizens cannot do. Only government can regulate food safety. Only government can build infrastructure. Only government can provide public education. Only government can provide for the national defense. Only government can regulate commerce. And all those things, and many others, need to be done.

Right now, because the economy is in very bad shape, there is a particular need for government. We have 15 million unemployed Americans, and a sadly lacking infrastructure. Back in 1933, when Franklin Roosevelt confronted a similar situation, he put people to work in federal agencies whose works endure to this day. Is there some reason we can’t put our people back to work rebuilding what has slipped away? If there is, I don’t know what it is. The talking heads would call it a socialist idea – I call it common sense.

But government can become too big – and too expensive – and it is both today. We cannot pay public employees more than taxpayers in the private sector earn for similar work. We cannot assuage every politician’s desire to accommodate every constituent and lobbyist. We cannot spend multiples of what others do on defense, and we cannot be the world’s policeman. We cannot assure everyone in America of a good life – only a chance at a good life. We cannot cure every disease, perform every procedure, and provide every drug that anyone may want. There are limits.

We must limit the reach and scope of government, but we must do so without depriving it of the resources needed to perform its essential functions. To make sensible choices, citizens must gather knowledge, and to do that, we must do more than listen to the talking heads. We must study newspapers, read books, attend seminars, listen to our neighbors and be open to alternative opinions. We must use the web to dig for facts. We must write to and talk with those we elect to every level of government, and we must be willing to devote a lot of time and attention to these important issues. In short, we must be lots more involved than we are.

If enough of us are willing to do those things, we’ll find a way out of the current morass. If we aren’t willing, things will continue as they have, to the detriment of our kids and grandkids.
I hope we’ll choose to fix the problem rather than follow failed leaders towards the unhappy future their performance promises.

People as they get older seem to want to return to a past that was simpler, while forgetting the hardships of what it took to live.The past administration somehow thought it could use faulted premises of war is good for our economy.Unfortunately it probably is for a strong manufacturing base, but in the last 20 yrs our base became a service economy due to outsourcing.They also decided to use borrowed money instead of funding not only 1 but 2 wars!. Who the hell did they expect to pay the bill? When most of the banking regulation was removed and the industry operated like the wild west, non of those responsible were held accountable.All of this is due to failed policies of our elected officials pandering to special interests.

Mr. Crandall... Boss! So great to see that you are still focused on what's important. I agree with your thinking 100%! Your leadership has always inspired me, Mr. Crandall, and I welcome it today. I am now writing my own blog, blackandwhyteconcepts@blogspot.com. We are neighbors! My initial postings are about an idea that I have which may help change the dynamics in our classrooms. What I just realized is that my background for the idea came from my education at American Airlines and STIN. Please find time in sunny Florida, between golf games and pro football, and let me know what you think. I've always shown how much I value your opinion by following your lead.Take care, sir. I look forward to hearing from you.

Mr. Crandall -- you are right on target. I'm a 50-year old businessman who was fortunate to grow up in an era when public education was deemed not just important but "critical." The GOVERNMENT paid for my 4-year degree as well as my MBA. From a tax revenue perspective, I can guarantee you that was an excellent ROI for the government. Investing in education pays tremendous dividends not just in tax revenue but in building a society.

Furthermore, I recognize that my business needs future consumers to purchase the goods and services we produce. And you can't do that with 5% millionaires and 95% living paycheck to paycheck. If the American middle class goes away, so does the millions upon millions of businesses that depend on the disposable income of the middle class. Raise my taxes. PLEASE - raise my taxes! Create the consumers who will allow my business to continue to be successful!

I've just read all of your blog posts to date and congratulate you on their cogency and clarity. I will put a link to here on my own blog in the hope that a few more people can benefit from your ideas.

As more people visit, you'll start getting nasty comments from the foolish. I'm sure you can deal with that - keep telling us what Bob Crandall Thinks!

I'm a reader from Canada. You have hit the points bang on in my opinion. Infrastructure, education, ensuring equal access for all as the same goals we have here. Sadly, our elected representatives continue to fail us over and over again. The United States has always been held in high regard. Time and time again, providing help to those who needed it. We are now at a time when the US needs to look within.